Open Credit Enablement Network will democratise credit, help small businesses: Nilekani

NEW DELHI: Aadhaar architect Nandan Nilekani on Wednesday said open credit enablement network – which will connect lenders and marketplaces – is in the works, and it will democratise credit in the country, helping small businesses and entrepreneurs get loans.

Speaking at the Global Fintech Fest 2020, Nilekani said India has become a “hotbed” of fintech innovation with inception of the UIDAI and NPCI over a decade ago and products like IMPS, FastTag and UPI have made transactions easier.

“There is something now which is getting developed called the open credit enablement network or OCEN which allows you to connect lenders to marketplaces…and this essentially acts as a common language, between lenders and borrowers.”

This would have a big impact as it would “truly democratise credit” and make sure credit reaches all the small companies, street vendors and others, he added.

As per technology think tank iSPIRT, OCEN is a common language for lenders and marketplaces to utilise and create innovative, financial credit products at scale. In this new credit paradigm, the marketplaces/aggregators using these APIs to embed credit offerings in their applications are called ‘Loan Service Providers’ (LSPs).

In a post on its website, iSPIRT noted that some of the top lenders in the country like State Bank of India, HDFC Bank, ICICI Bank, IDFC First Bank, Axis Bank and Bajaj Finserv have come onboard and will soon be in a state of readiness to usher in OCEN. iSPIRT also will start a series of open house discussions on the OCEN on July 24.

Nilekani, during his keynote address, said OCEN acts as a common language between lenders and borrowers. “It’s very important to have a common language. Just like UPI provided a common language between debit and credit, which allowed us to create this huge ecosystem. OCEN also enables that…iSPIRT has been leading this effort to create this protocol.

“The good news is that many of the lenders are willing to adopt this protocol and now we need marketplaces (LSPs) to also adopt this protocol, and which then allows them to embed loans in their daily working,” he said.

The Infosys chairman said from a fintech perspective, many of the pieces are now falling into place, and the COVID crisis has increased the pace of digitisation.

“I think something that would have taken years is getting compressed into weeks and months. I think the areas where we obviously need to apply digital technologies, one is to the area of healthcare…and education,” he added.

Nilekani further said inclusivity needs to be ensured when developing digital public systems.

“It is not about just satisfying the top 50 million people in the country, how do we get a billion people to participate. Like in payments, we can use UPI on smartphones and on feature phones…we have to have a solution for every everyone in the country (for it) to be inclusive. That’s one thing we should keep in mind when we think about these kinds of public systems,” he added.


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